The markets are on an uptrend. Will they go all the way up or is there some downside to the optimism? Here is what the charts suggest along with the stocks that are likely to remain in action following developments over the weekend.
The equity markets ended firm on Friday with the Nifty closing above 5650 on the back of buying witnessed in financial shares after the central bank raised overseas borrowing limits for lenders in a bid to prop up growth and boost the rupee. The Nifty gained 87 points to close at 5680. In our last write up we had mentioned about 5690 on the Nifty to act as a stiff resistance and the Index made a high of 5689. Going ahead, the Nifty may face resistance around 5720-5755 levels. This zone of 5720-5755 is s major hurdle for the Index and if the bulls manage to close above this level we may see a rally of up to the 6000 mark. But looking at other momentum oscillators it seems that the Nifty may enter into a consolidation or minor correction phase after hitting levels of 5755. On downside 5645 will act as first important support level with the second coming in at around 5580.
Vedanta Plc., may increase its offer for acquiring the government’s stake in Hindustan Zinc by another 10 per cent. This is as per the recommendations made by the Vedanta’s bankers to it. Discussions have been going on between the government and Vedanta for a long time over this stake sale. As per sources, Vedanta is now looking to acquire the government’s 29.5% stake in the company by the end of this year. The HZL stock will ride this development in trades today.
Tata Power and Adani Power may have to wait a bit longer as CERC has asked more information from the Parekh Committee on compensatory tariff for the power projects of these companies. It has also asked all the panel members to sign the report saying that the views of the members do not represent the views of the respective state governments. This is a setback for Tata Power and Adani Power and hence one may see some volatility in their shares going into trade this new week.
Hero MotoCorp seems to have hit another hurdle on the worker side. The company is ‘grappling with new problems with the workforce at its Gurgaon facility’ reports Business Standard. The suspension of nine office bearers of the employees union last week has resulted in this problem cropping up for the company. How far will this issue go? May be not too far, but the stock will certainly face some resistance until the air over it gets cleared. Expect some downside and pressure in the Hero stock.
Telecom companies will shine today. Reports suggest that the government is mulling over the idea of bringing down the spectrum price. The TRAI is toying with the idea of bringing down the base price from Rs 2379 crore to Rs 1496 crore- a sharp 37% down in order to ensure that there are more takers for the spectrum. The move follows the failure of two auctions on earlier occasions. The government probably does not want to take any chance on the third one and ensure that it goes through well. Idea, Bharti, RCom – watch them for today.
